Tokenized treasuries have reached more than $10bn, but this is still only a tiny portion of the trillions of dollars of U.S. treasuries that could be used more efficiently onchain as collateral. More than half, 58%, of market participants currently face challenges in managing their collateral and margining. The study Treasuries On-Chain: An industry case for change said collateral flows involve a manual, risk-prone post-trade environment that only operates within standard banking hours. Moving more treasuries onchain, making it faster and easier to move collateral 24/7 could generate $54m in just operational savings in the U.S., without sacrificing risk or income.
To highlight the potential of using onchain collateral, financial institutions took part in two sets of short-term onchain repo transactions that involved U.S. Treasury bills versus stablecoins on the Canton Network. In January this year a third set of onchain repo transactions took place on the Canton Network. For the first time, intraday repos were conducted cross-border using multiple currencies and multiple asset classes, including European government bonds, U.S. Treasuries, euro cash, and U.S. Dollar cash. Financial market infrastructures London Stock Exchange Group, Euroclear and Euronext were also involved.
This latest set of transactions marks a major milestone for the industry working group, spanning cross-border intraday repo activity across multiple assets and currencies and leveraging tokenized deposits at LSEG Digital Settlement House (LSEG DiSH) to provide greater liquidity options. LSEG DiSH allows users to instantaneously transfer tokenized commercial bank deposits to any member of the DiSH network, which is transferable 24/7 in real time, without requiring users to have relationships with every bank on the DiSH network. The working group will continue to collaborate on more onchain financing initiatives in 2026.
There is demand from traditional finance to bring high-quality, liquid onchain in a usable form to improve collateral mobility and facilitate intra-day financing. There is a growing demand from the crypto market from newer exchanges and CCPs for onchain assets and infrastructure. Applications are being created to use onchain assets.
DTCC said they are working towards a minimum viable product in a controlled production environment during the first half of 2026, with plans to increase the size and scope of the project in the months that follow, based on client interest. This collaboration creates a roadmap to bring real-world, high-value tokenization use cases to market, starting with U.S. Treasury securities and eventually expanding to a broad spectrum of DTC-eligible assets across network providers. JPM Coin is the first bank-issued U.S. dollar-denominated deposit token and provides institutional clients with the ability to make payments using a digital representation of J.P. Morgan deposits on a public distributed ledger.
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